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Federal Consolidation Loans

This program allows you to combine all of your federal education loans into a single, more manageable loan, allowing you to make one monthly payment and extending your repayment period up to 30 years depending on the loan amount. You may also be able to secure a lower fixed interest rate for the life of the loan.

Federal Consolidation loans are available through either the Federal Family Education Loan (FFEL) Program or the William D. Ford Federal Direct Loan ("Direct Loan") Program. The terms and conditions of a FFEL Consolidation and a Direct Loan Consolidation are similar. The major differences between them are the source of the loan funds, some aspects of the application process, and the available repayment plans. If you have Direct Loans, see our page about Federal Direct Loans.

Who is eligible?

Borrowers must have entered repayment on each loan chosen for consolidation. Additionally, seriously delinquent or defaulted borrowers may be eligible to consolidate their student loans.

How do I apply?

To apply for a consolidation loan, you must first contact your current loan holder (lender). If your loan holder does not offer loan consolidation or if your lender does not offer an income-sensitive repayment schedule, you may apply to any other loan holder that participates in loan consolidation. Borrowers with more than one loan holder may consolidate the loans with either loan holder.

What type of loans can be consolidated?

  • Federal Stafford (subsidized and unsubsidized)
  • Federal PLUS (Parent or Graduate Borrower)
  • Federal Supplemental Loans for Students (SLS)
  • Federal Consolidation
  • Federal Direct Student Loans (FDSL)
  • Federal Insured Student Loans (FISL)
  • Federal Perkins Loans
  • Health Professions Student Loans (HPSL), including Loans for Disadvantaged Students (LDS)
  • Federal Nursing Student Loans (NSL)
  • Health Education Assistance Loans (HEAL)

How is the interest rate calculated?

A fixed interest rate is determined by taking the weighted average of the interest rates, rounded up to the nearest one-eighth of one percent. The interest rate will not exceed 8.25 percent. If HEAL loans are included in the consolidation, a different calculation is used.

Is consolidation always the right decision to make?

Borrowers should consider the following when making consolidation decisions:

  • How much will the total interest cost increase based on smaller installments but a longer payment period?

  • Will consolidation affect the terms of the borrower's current repayment agreement? Consolidation may adversely impact deferment options and may negate any borrower benefits the current loan holder may provide, such as reduction in interest rates for on-time monthly payments.

  • Is Perkins consolidation a good thing? It depends. Consolidation provides the convenience of making one monthly payment; however, a Perkins borrower forfeits any loan forgiveness benefits and becomes responsible for interest that may accrue during periods of deferment.

Is there a fee charged for these loans?

No.

How will I receive my loan?

After your Federal Loan Consolidation Application has been signed and approved, your consolidating loan holder will pay each holder of the loans that are being consolidated the appropriate amount. Your consolidating loan holder will notify you of the terms and conditions of your new loan.

When do I have to start repaying my loan and how much?

The first payment on Federal Consolidation loans is due within 60 days after full disbursement, unless the borrower qualifies for a deferment. For more information on repaying your loan, see Tips on Borrowing and Repaying Student Loans or visit the
Oklahoma Guaranteed Student Loan Program website.

Can my loan be cancelled or forgiven (discharged)?

A loan can be cancelled or forgiven only under specific circumstances. A discharge releases you from all obligations to repay your loan. For more information on the qualifications for a cancellation, see Tips on Borrowing and Repaying Student Loans or visit the
Oklahoma Guaranteed Student Loan Program website.